TMGM Daily Market Breakfast: 22 September 2026

Morning Snapshot

• Federal Reserve officials reinforced a hawkish policy message after last week’s rate increase to 3.75%–4.00%, with St. Louis Fed President Alberto Musalem and Boston Fed President Susan Collins both signalling that further tightening may be needed to contain inflation.
• The US Dollar held firm on the back of the Fed’s hawkish stance, with the Dollar Index near 100.45–100.50 and EUR/USD around 1.1460 during European trading.
• The Japanese Yen remained under pressure after the Bank of Japan’s 25-basis-point rate increase to 1.25%, as a split vote, limited hawkish guidance and a recent BoJ rate check kept intervention risks in focus while USD/JPY traded around 157.45–157.55.
• Iran offered to reopen the Strait of Hormuz within seven days if the United States takes initial steps to ease military pressure, adding a new diplomatic development to a conflict that has kept global energy supply risks elevated.
• Oil prices remained volatile as diplomacy and reopening hopes weighed on the risk premium, with WTI trading around $91.90 on Monday before rebounding toward $92.30–$92.50 in Asian trading on Tuesday.
• The Trump administration is considering a $5 billion Middle East reconstruction fund aimed at rebuilding war-damaged infrastructure and reducing regional reliance on the Strait of Hormuz for oil and gas transport.
• US Treasury Secretary Scott Bessent said Iranian airlines could effectively be shut out of international travel from September 23 if foreign companies continue servicing them, as Washington threatened secondary sanctions.
• UK public sector borrowing rose more than expected in August, reviving concerns about government finances and weighing on sterling after an earlier gain.
• Reserve Bank of Australia Assistant Governor Sarah Hunter said further rate hikes this year are needed to keep inflation in check, while RBNZ Governor Anna Breman said persistently higher oil prices would lift near-term inflation.
• Bank of Canada Governor Tiff Macklem said inflation is set to drift somewhat higher in coming months and that policymakers must look beyond the initial oil shock as energy prices and US tariffs create competing risks for inflation and growth.

Market Developments

Foreign Exchange

The US Dollar stayed supported by hawkish Federal Reserve signals, with the Dollar Index near 100.45–100.50 and EUR/USD around 1.1460, while USD/JPY traded around 157.45–157.55 as the Yen weakened despite the Bank of Japan’s recent rate increase. USD/CHF traded around 0.8200, and EUR/JPY rose 0.2% to about 180.78.

Energy

Crude prices were volatile as Middle East supply risks competed with diplomatic headlines. WTI traded around $91.90 on Monday, down 3.54% on the day, after a four-session decline, then steadied near $92.30–$92.50 in Asian trading on Tuesday. ING said Brent had fallen around 2% to below $102 a barrel and WTI to around $98 at the start of the week.

U.S. Equities

The Dow Jones Industrial Average traded near 51,900 after its worst week since March, with sentiment helped by signs that Washington was open to talks with Iran and by oil moving back below $100.

Macroeconomics & Central Banks

Fed Officials Reinforce Hawkish Message After Rate Increase to 3.75%–4.00%

Federal Reserve officials continued to signal that policy may need to tighten further after last week’s increase in the federal funds rate to 3.75%–4.00%. St. Louis Fed President Alberto Musalem said rates likely need to rise further to tame inflation that remains both demand- and supply-driven, arguing that without more restraint inflation is more likely to remain substantially above the Fed’s 2% target 18 months from now.

Musalem said inflation was still “too high” at up to 3% even after stripping out supply-related factors, and said business contacts were planning price increases “closer to 3%.” He described the labour market as stable around full employment and not a source of inflation pressure, while warning that the commodity shock extended beyond oil to base metals including copper. He also said it was better for rate hikes to be “earlier and incremental” rather than “later and larger.”

Boston Fed President Susan Collins said renewed hostilities in the Middle East were a key reason she supported last week’s rate increase. Other Fed officials also kept the tightening bias in focus. Brown Brothers Harriman noted that Chicago Fed President Austan Goolsbee warned of “more aggressive and more and more front-loaded” rate hikes if demand is overheating, while New York Fed President John Williams, Fed Vice Chair Philip Jefferson and Richmond Fed President Tom Barkin were also due to speak later in the day.

Dollar Holds Gains as Fed Tightening Outlook Supports US Growth Premium Narrative

The US Dollar remained supported by the Federal Reserve’s hawkish tone, with the Dollar Index trading near 100.45–100.50 and EUR/USD around 1.1460 during European hours. Brown Brothers Harriman said the Dollar was extending gains after the latest hawkish Fed hike, even as headlines suggesting the Strait of Hormuz could reopen soon took some steam out of the move and weighed on energy prices.

BBH said tightening by other major central banks limited policy divergence with the Fed, but argued that the United States still retained a relative growth advantage over other major economies. The firm said upcoming September S&P Global PMI readings were likely to show the US maintaining a growth edge over the Eurozone, the UK and Japan.

Yen Stays Weak After BoJ Hike as Split Vote and Rate Check Keep Intervention Risks Alive

The Japanese Yen remained under pressure even after the Bank of Japan raised its policy rate by 25 basis points to 1.25% on Friday, its highest level in 31 years. USD/JPY traded around 157.45–157.55, while EUR/JPY rose 0.2% to about 180.78, as markets focused on the central bank’s limited hawkish follow-through and the risk of official intervention.

BoJ Governor Kazuo Ueda left the door open to further increases if economic activity and prices evolve in line with the central bank’s projections, but divisions inside the policy board tempered support for the currency. Two members called for greater patience before additional tightening, and reporting also highlighted a split vote around the decision.

The BoJ conducted a rate check with market participants on Friday, a move closely watched as a possible precursor to intervention. Japan’s markets were shut from Monday to Wednesday for national holidays, a period that some market participants said could make any official currency action more effective.

RBA, RBNZ, ECB and BoC Officials Flag Inflation Risks From Energy Shock

Central bank officials across several major economies kept the inflation impact of higher energy prices in focus. Reserve Bank of Australia Assistant Governor Sarah Hunter said further rate hikes this year were needed to keep inflation in check, strengthening the case for additional tightening.

Reserve Bank of New Zealand Governor Anna Breman said that if higher oil prices persist, they are expected to result in somewhat higher near-term inflation than assumed in the September statement. In Europe, ECB Chief Economist Philip Lane said the energy shock could delay inflation’s return to the central bank’s 2% target, while adding that the euro area economy would expand steadily at a moderate pace if the shocks ease.

Bank of Canada Governor Tiff Macklem said inflation was likely to “drift up a little higher in the coming months” and warned that “a new era of uncertainty is not going away any time soon.” He also said rate decisions must look beyond the initial oil shock, with higher energy prices and US tariffs creating competing risks for inflation and growth.

UK August Borrowing Overshoot Revives Fiscal Concerns

UK public sector borrowing rose more than expected in August, reviving concern about the state of government finances. Sterling reversed earlier gains against the Dollar after the data, as the larger borrowing figure renewed scrutiny of the UK fiscal position.

Geopolitics, Energy & Sanctions

Iran Offers Hormuz Reopening as Diplomacy Tempers Immediate Supply Fears

Iran offered to reopen the Strait of Hormuz within seven days if the United States takes initial steps toward easing military pressure, according to Kyodo News. The waterway is a critical chokepoint for almost 20% of global energy supply, making any shift in access highly significant for oil markets and global trade.

The diplomatic signal came as President Donald Trump said he would probably be open to meeting Iranian President Masoud Pezeshkian at the United Nations General Assembly this week. Those headlines helped ease some immediate supply concerns and contributed to softer crude prices at the start of the week.

Oil Market Swings Between Diplomatic Relief and Structural Supply Tightness

Oil prices remained volatile as diplomatic developments in the Middle East competed with ongoing supply disruption concerns. WTI traded around $91.90 on Monday, down 3.54% on the day and extending a four-session losing streak, before stabilising near $92.30–$92.50 in Asian trading on Tuesday.

ING said Brent had fallen around 2% to below $102 a barrel and WTI to around $98 at the start of the week, with profit-taking after recent gains and hopes for constructive discussions at the UN General Assembly and an upcoming Trump-Xi meeting helping improve sentiment. At the same time, the bank said supply concerns remained elevated after Saudi Aramco warned some European customers that it may be unable to allocate crude cargoes next month under long-term contracts because disruptions to the East-West pipeline had limited crude availability at Yanbu.

ING said the pipeline was damaged in last week’s drone attacks and could take several weeks to fully restart. It also pointed to tighter refined-product markets, noting that August exports from key Asian suppliers declined as constrained crude availability and refinery outages weighed on flows. India’s gasoline and diesel exports fell 14.5% and 19.2% year on year respectively, while Chinese gasoline exports dropped 57.4%.

Societe Generale said global oil product markets had shifted from tight to critical, citing East-West pipeline disruptions, Russian refinery outages, elevated freight costs and low inventories. The bank said refining margins remained extremely high across the US, Europe and Asia, indicating that the global refining system was struggling to replace lost supply, rebuild inventories and meet demand simultaneously.

US Threatens Secondary Sanctions on Iranian Airlines From September 23

US Treasury Secretary Scott Bessent said Iranian airlines could effectively be shut out of international travel from September 23 if foreign companies continue servicing the country’s carriers. Al Jazeera reported that Washington was threatening secondary sanctions against those companies, widening the pressure campaign on Iran beyond the battlefield and energy trade.

Trump Administration Weighs $5 Billion Middle East Reconstruction Fund

The Trump administration has proposed investing $5 billion in a new fund to help rebuild critical infrastructure across the Middle East damaged in the war with Iran, the Wall Street Journal reported. The proposal is also aimed at reducing the region’s reliance on the Strait of Hormuz to transport oil and gas, linking reconstruction policy directly to energy security and trade resilience.

Houthi Advance in Yemen Keeps Red Sea Security Risks in View

Yemen’s Houthis pushed to seize strategic highlands in an effort to cut off the Red Sea coast from remaining areas held by Saudi-backed forces, Reuters reported. The move added to regional security concerns after a report that President Trump had called off US strikes on the group at the last minute, keeping risks around Red Sea shipping and broader Middle East trade routes in focus.

Corporate & Market Structure

Coinbase Opens IPO Allocations to Eligible US Retail Investors

Coinbase said eligible US retail customers can now request allocations in selected initial public offerings directly through its app, expanding the platform’s reach beyond crypto and regular stock trading. The service is being offered through Coinbase Capital Markets, the company’s FINRA-registered broker-dealer.

Oura’s IPO, scheduled for later this week, will be the first offering available through the new service. Coinbase said customers who sell IPO shares within 30 days may face a 60-day participation ban, while repeat early sellers could receive smaller and less frequent allocations.

Upcoming Key Events

• S&P Global September PMI Readings — null: September PMI releases are due and were highlighted as a key near-term gauge of relative growth momentum across major economies.
• Federal Reserve Official Speeches — null: New York Fed President John Williams, Fed Vice Chair Philip Jefferson and Richmond Fed President Tom Barkin were scheduled to speak later in the day.
• Oura Initial Public Offering — null: Oura’s IPO is set for later this week and will be the first offering available through Coinbase’s new IPO allocation service for eligible retail customers.